Chancellor Rishi Sunak has announced that the furlough scheme is to be extended until the end of April 2021 with the Government continuing to contribute 80% towards wages.
In a move to ensure firms can access the support they need through continuing economic disruption, Mr Sunak also confirmed that he would be extending the Government-guaranteed Covid-19 business loan schemes until the end of March.
These changes come ahead of the Budget, which the Chancellor has confirmed will take place on 3 March 2021.
This will, he said, deliver the next phase of the plan to tackle the virus and protect jobs, so the extensions to the business loan and furlough schemes enable businesses to plan with certainty and access support in the first few months of the New Year ahead of that further update on wider Covid-19 economic support.
The eligibility criteria for the UK-wide scheme will remain unchanged and these changes will continue to apply to all Devolved Administrations.
The Chancellor said he would review the employer contribution element of the Coronavirus Job Retention Scheme (CJRS) in January, but decided to bring this forward to allow businesses to plan ahead for the remainder of the winter and the New Year.
The Government will continue to pay 80% of the salary of employees for hours not worked until the end of April, he confirmed.
Employers will only be required to pay wages, National Insurance Contributions (NICs) and pensions for hours worked, and NICs and pensions for hours not worked.
The loans available until the end of March are the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme and the Coronavirus Large Business Interruption Loan Scheme.
These had been due to close at the end of January.
The Treasury has pointed out that extending the CJRS until the end of April gives businesses certainty well ahead of the 45-day redundancy notice period, with the Budget setting out the next phase of support more than 45 days before the new end date of the scheme.
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